US snack group Diamond Foods has reported a fall in its losses for the first nine months of its financial year, although the Kettle Chips owner has had to restate its first-half earnings.
Diamond said yesterday (10 June) it had to revise its second-quarter and first-half earnings per share as it had miscalculated the dilutive effect of a change in the fair value of a warrant liability to Oaktree Capital Management.
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Last year, Oaktree invested US$225m in Diamond to help restructure its balance sheet in the wake of an accounting scandal that rocked the company. That affair also meant Diamond had to restate its results for its 2009/10 and 2010/11 financial years.
For its current fiscal year, Diamond has now booked a second-quarter loss per share of US$0.37, compared to earnings of $0.43 a share. Over the first six months of the year, Diamond in fact made a loss of $0.50 compared to a loss of $0.03.
The restatement came alongside Diamond’s results for the first nine months of its financial year. It booked a net loss of $16.2m, down from $53.4m a year earlier. The result came despite lower sales as Diamond reported a lower cost of sales and because last year’s results included a charge linked to the failure of its bid to buy Pringles in the wake of the accounting scandal.
Diamond said sales were lower amid moves to cut SKUs from its nuts business and lower promotional spending on its Emerald brand.
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By GlobalDataFor the third quarter, losses fell and sales slid but its gross margins were up. “The progress we are making with our efforts to revitalise the company is reflected in our results this quarter,” CEO Brian Driscoll said. “The improvement in gross margins reflects both an increase in net price realisation in our portfolio and results of our cost saving efforts that are materializing in our operations and supply chain. While we still have difficult and important challenges to tackle, we continue to track toward an operating model that is designed to create sustainable growth.”
Diamond also yesterday announced the appointment of Raymond Silcock as CFO. Silcock’s CV includes roles as CFO at US retailer A&P, meat packer Swift and Canadian soft drinks firm Cott Corp.
